Friday, 10 December 2010
Criteria for inclusion in the index are private companies with most recent year sales over £5m that have posted a profit in most recent year, ranked by turnover growth over most recent 4 years.
Now, this is "just a bit of fun", but a quick analysis of the supplement shows there are 10 dedicated online product retailers on there;
In addition, there are at least 7 other consumer websites featured.
Number of catalogue retailers or mentions of catalogues? None.
Just saying, that's all.
Thursday, 7 October 2010
Value Paracetemol: 16p
Both state "Each tablet contains Paracetemol BP 500 mg. Also contains E223."
They are exactly the same.
Exactly. The. Same.
But the simple addition of the Boots brand adds a 143% price premium.
I hope somebody at Boots loses some sleep over this - we are after all talking about a medicine here - but I doubt they do.
I know this is not news ... but it is a such a great illustration of pure Brand power I felt I should share for those who may have missed it.
I did a quick search and found this rather good and thorough post on the subject for those curious for more detail http://bentsocietyblog.blogspot.com/2010/03/exploitation-of-public-ignorance.html
Thursday, 11 March 2010
Most people with an interest in SEO (Search Engine Optimisation) are aware of Google's Page-Rank Algorithm.
The way page rank works is in essence very simple: each link from a page (page A) passes 'page rank' to the page it links to (Page B) ... the value of 'page rank' passed is the 'page rank' of page A divided by the number of links out from page A. The same then applies for Page B to Page C and so on.
The smarter of you will recognise that this is an iterative calculation (as the network effect means that Page Rank passed down will eventually be passed back in some form). The really smart amongst you may conclude this would be a non-convergent iteration; I believe that Google build in a 'decay factor' to prevent the problems that would ensue as a result. Of course the Page Rank calculation is in practice more complex still -- Google has algorithms and methods for determining the quality of links and pages which significantly refine the calculation.
Rel = "Nofollow": Google's Blindfold
Back in 2005/2007? Google adopted a policy whereby if the link from page A to Page B was given a Rel = "nofollow" attribute then Google would effectively ignore that link for Page Rank purposes.
The logic behind this move appears to have been somewhat confused. The intention was to allow websites to qualify outbound links to help Google (eg. to ignore paid links, advertisments, reciprocal links etc.); the actual outcome was for sites to suddenly start to 'nofollow' as many links as possible to preserve their page rank.
This is potentially catastrophic to Google's Page Rank algorithm: there are very few websites out there now that don't now 'nofollow' their outbound links (eg. Almost every forum, most blogs, Facebook, Twitter, You Tube etc.). If you want to check, go to a page with outbound links, right-click, 'view source', ctrl-f to find the link in the source code (use the anchor text of page URL as your search) and look for rel="nofollow" within the reference tag.
By trying to prevent people artificially boosting Page Rank, Google seem to have cut-off their main sources of 'natural linking' Page Rank. Your site may be being talked about on plenty of forums, people may be recommending you to their Blog readers ... but if the links are 'nofollow' google is blind to them.
So then in 2009 Google (quietly) let it be known that the Page Rank of the outbound page would still be diluted by the 'nofollow' links (so there is no Page Rank benefit to our 'Page A' of 'nofollow'ing outbound links; they still dilute the Page Rank passed by the nomal links) ... but that the receiving Page (our 'page B') would still not get any Page Rank benefit.
I guess the hope from Google is that people will be far more sparing in their use of nofollow tags as a result. Personally I greatly doubt it -- and even if this changes webmaster behaviour going forwards, google is poking its own eyes out if it continues to ignore the inbound Page Rank from nofollow links. Think about it: as it stands Google ignores sites that are being talked about on Forums, mentioned on Twitter, linked to from Facebook .... how can that be a good thing?
My personal view is that Google will quietly revoke the 'ignore nofollow' policy (if they haven't already) or see the quality of their search results decline (and allow the likes of Bing to make real in-roads).
It will also mean that new websites will find it far harder to build Page Rank (and therefore strong search engine results) than the embedded encumbents (who have links to their sites pre-dating the whole 'nofollow' wave). So not all bad then :0)
If you want to know more about this, you should read what Matt Cutts (the most public 'Google Guy') has to say; this blog entry of his (and the ensuing comments) is fascinating (if you like that sort of thing).
If you've read this and think "that's far too geeky and dull for me to care about" ... I hope that your businesses' and/or your personal success does not depend on your website(s) performing well in Google searches!
Saturday, 6 March 2010
Remember before Google Analytics came along and service providers and consultants would (try and) charge you significant sums for analysing your web-logs and providing click overlay analyses? In fact it’s not that long ago that I had a conversation with the MD of a large catalogue retailer who was telling me about the amazing analytics service they were paying (through the nose) for; from what I could see they did little more than repackage the Google Analytics data -- so there may be a bit of that still out there.
I wonder if we will soon be looking back on Hitwise (the excellent but expensive online competitive intelligence service, now owned by Experian) as another victim of Google’s policy of providing intelligence for free?
Let's look at what Adplanner does (and does not) provide by using one of my own sites (so I can compare the data given with Hitwise and own Analytics data)
Adplanner Data for Petplanet.co.uk
The data quality certainly appears solid in terms of overall traffic levels and, as far as I can tell, the socio-demographic data looks good.
Using this tool to compare with our online specialist competitors (I'll leave it to you to work out who they are!) I can see (and more importantly now potential advertisers and suppliers can see) that we achieve more than double the reach of any of these guys.
We (uniquely amongst our peers it seems) have elected to share our Google Analytics data (on the basis that we are proud of our numbers and aren’t shy about sharing). I see that as a result Google under-estimates our UK traffic and messes up the visits/user calculation; a bug I'm sure they'll fix and the overall picture is still accurate.
Indeed compare our reach to the pet retail giant that is Pets at Home and (allowing for how much of their traffic is store-finding and searching for the brand itself) I would argue the data supports my argument expounded in earlier Blog (Exploding the Multi-Channel Myth) that Online specialists occupy a competitive space that the off-line brands’ online propositions can't reach. The Pets at Home data also highlights some data glitches in the system – their traffic figues appear overstated (cf Hitwise) and I would very much doubt that 100% of www.petsathome.com traffic is from the UK.
Which brings us to ask the obvious question: how good is the data and is there any systematic bias? Google states
"DoubleClick Ad Planner combines information from a variety of sources, such as aggregated Google search data, opt-in anonymous Google Analytics data, opt-in external consumer panel data, and other third-party market research."
I think in practice what this means is the traffic data is google search based (unless the site in question elects to share analytics data) and the demographics data is triangulated from other sources. I suspect this means that sites who use a lot of email activity to drive traffic and/or have a high proportion of users who have 'favourited' them will be under-represented (as they will have a higher than average proportion of 'direct' traffic).
The keyword and site affinity data is also frankly pretty ropey; it does not triangulate well with Hitwise (or intuition) and is really of little commercial value at the moment. Take the example of our gardening / garden furniture site
Adplanner data for Greenfingers.com
Telling me that 'marks spencer' and 'sainsburys' keywords have a high affinity with my site is not of much use.
You have to wonder how long before Google extends/improves that information though (for a fee?) so that we can all see what keywords are driving traffic to our competitors and which ones they are spending PPC budget on (the main incremental value that Hitwise still offers). You have to wonder how long before Google extends/improves that information as well (for a fee?) so that we can all see what keywords are driving traffic to our competitors and which ones they are spending PPC budget on (the main incremental value that Hitwise still offers).
The 'sites also visited' data is fairly random at the moment too. To avoid getting too carried away with my own sites and hitwise data I tried checking eg. www.wiggle.co.uk versus www.chainreactioncycles.com (who are head-to-head competitors in their space as confirmed by Hitwise and common-sense) but they don't appear in each others' 'sites also visited' ... which is plain wrong.
Hard to be critical when you consider the data is free; it's pretty powerful data and a useful Competitive Intelligence tool. I'd be interested to hear others' perspectives.
Tuesday, 23 February 2010
Talent in Business
The theme of hiring, motivating, nurturing, developing and retaining Talent is surely common to all business.
I started my career as an analyst in a strategy consulting business (OC&C Strategy Consultants) and went on to be a partner; so in that environment I have both been 'the Talent' and been responsible for developing 'the Talent'. The consulting approach to talent management is very simple and empirically very successful. In that world you find the smartest young things (academic over-achievers who can demonstrate an intuitive feel for business and a structured approach to problem solving) and you (implicitly) offer them the following deal:
- You'll get well paid; you'll get well trained; you'll be on a constant rapid learning curve; you'll get to be involved in deals you read about in the (business pages) of the papers; we will support you to maximise your productive time. We will make you look good, feel good and be proud of what you do.
- We will 'own' you for the next few years of your professional life. You will find you are no longer 'comfortably the smartest person in the room' and this will make you insecure; we will use that insecurity to drive you to work harder; we will keep increasing the work-load you are given until you can't take any more (and only then will we back off); you will work harder than you have ever worked in your life.
Strategy Consulting may be one of the more extreme examples of a 'talent driven' business -- but anybody involved in managing and growing businesses will (or should) have some version of the above 'Faustian pact' in place. You seek to identify and nurture talent; you make a (normally implicit) deal with that talent; you succeed or fail on your ability to identify, develop, exploit* and retain that talent.
Talent in Sport
From the perspective of an interested but largely peripheral observer, the parallels with developing a pro-sports team appear striking to me -- let me repeat the 'deal' outlined above and see how much tweaking is required to fit this to the sporting world
- You'll get (well) paid: in many cases simply being a professional sportsman meets the financial objective here
- You will get well trained and be on a constant rapid learning curve: In the last few weeks the Endura Racing guys have been lining up and holding their own alongside seasoned Tour pros ... and are being coached by Olympic and World Championship medallists.
- You will get to be involved in deals you read about in the (business pages) of the papers: Substitute 'deals' for 'races' and 'sports for 'business' and you are there -- next week the guys are competing in 'la Vuelta a Murcia' lining up alongside Armstrong, Contador et al
- We will support you to maximise your productive time. That's what being in a pro-team and being looked after on trainng camps is all about
- We will make you look good, feel good and be proud of what you do. Well, they are wearing Endura kit, riding top-end hardware and being well covered in the cycling press so they should!
In return for which
- We will 'own' you for the next few years of your professional life. Of course you don't 'own' your riders (particulalry in an environment where individuals have Commonwealth, Olympic and World Champioship objectives and National Coaches to satisfy) ... but we are certainly looking to develop the riders while getting the best possible exposure of and representation for the Endura brand
- You will find you are no longer 'comfortably the smartest person in the room' and this will make you insecure; we will use that insecurity to drive you to work harder. Switch 'smartest' for 'fittest' and this summarise perfectly how (hopefully) the step up to being in a competitve pro-team will lift the riders training work-load, motivation and ultimately performance
- We will keep increasing the work-load you are given until you can't take any more (and only then will we back off); you will work harder than you have ever worked in your life. Again, for 'work' read 'riding' and this is surely what being in a pro-team is all about
The Common Lessons
I don't want to stretch the idea too far here or become overly prescriptive; let me make a couple of simple observations though;
- Business people developing talent could do worse than read what David Brailsford has had to say about motivating athletes and building a team structure
- Directeurs Sportives (or Sports Team Managers more generally) could learn a lot from the discplines that exist when it comes to developing talent in business (how about formalised appraisal processes and written reviews? Explicit 'promotion' objectives? Mentoring programmes?)
* Used here in the non-perjorative sense: to utilize, esp. for profit; turn to practical account ... to advance or further through exploitation; promote
Friday, 19 February 2010
I have worked in an advisory capacity for many catalogue and bricks and mortar retailers and (with Greenfingers.com) have a successful online business that used to be a catalogue business and has gone from strength to strength since we stopped producing catalogues. Also, with Petplanet.co.uk we experimented with catalogues a few years back and concluded they were a bad idea for us; Petplanet now dominates its category online in the UK.
My distilled view, for what its worth, is that there are very few successful online businesses that would benefit from developing a catalogue. Why? Some of the reasons would include;
- The difference in the fundamental economics between offline and online trading (ie. the required margin structure and therefore appropriate pricing strategy),
- The potential conflict between appropriate online and offline pricing (driven by the above)
- The different buying and merchandising cycles required (print deadlines and mailing dates can come to dominate the rhythm of the business at the expense of the 'continuous' processes required to optimise the web; the optimum range online is different from the optimum range offline)
- The problem of dependency on Royal Mail and their pricing policies for catalogue retailers
- The 'big picture' issue that posting millions of catalogues is simply 'system inefficient'
Of course if you already have an established retail brand with customers who value your 'range editting' on their behalf then catalogues may continue to play an important role ... but personally I believe (and have for a while) that print catalogues are the past and online is the future (and most if not all of those arguing the value of print are those with vested interests in keeping that 'channel' alive). *UPDATE* The Sunday Times Fast Track 100 adds some weight to my argument about the death of catalogues, read more here,
Similar arguments apply for bricks & mortar retailers developing the online channel. Of course this represents a great opportunity for them and is a fundamental requirement ... but they will always struggle to compete with online specialists because of the conflicts between optimising price and merchandising online versus off-line.
I would not be surprised to see 'off-line category killers' start to experiment with additional online propositions under a different brand from the off-line business so that they can compete properly online.
Basically I think there are 2 kinds of online retail businesses: 'off-line retail brands trading online' and 'pure online retailers' ..
IMHO off-line brands are missing an opportunity unless they realise that to compete effectively with 'pure online retailers' they need to develop a specialist online brand that can be managed without concern for conflict with the existing off-line brand.
Friday, 12 February 2010
Here's How it breaks down ...
- Affiliates are a 'good thing' if they drive traffic to your website that you would not otherwise receive and/or if they provide reassurance to punters (who have already found you but are searching further) by redirecting them back to you.
- Voucher Code (aka Coupon Code aka Discount Code) affiliates rarely if ever do this ... having analysed the traffic paths in some detail (thanks to Hitwise) the reality is that most Voucher Code affiliate commissions are generated as a result of the user searching for your website brand name and 'voucher codes' (or equivalent) after they have decided to purchase from you and normally when they are at the point in your check-out process where a voucher code could be entered
- Of course they don't need to succeed in finding a voucher code for you to leak the commission, they simply need to click one of the links on the Voucher Code site's page to now be tracked as the last referrer for this transaction
- And if you think it through, it get's worse; if the transaction had been referred by another affiliate, the Voucher Code affiliate 'hijacks' that commission by being seen as the last affiliate referrer before the order is placed ... and of course if a voucher code does exist and the punter finds it on that site you are now paying affiliate commission and funding a voucher discount on that transaction (so chances are the transaction is economically marginal for you anyway)
Of course there is an argument in favour of the voucher code sites which goes something like this: bargain hungry customers start their journey at the voucher code site (or are prompted by an emailer having signed up to a voucher code site) and follow the journey that goes 'this retailer is offering a voucher so I will shop at this retailer now' (rather than its competitor, presumably). I simply don't buy this logic (even for those firmly established retail brands where the consumer is more likely to respond to the prompt to shop from this retailer because of the Voucher Code offer itself). Certainly for the majority of web businesses the cost of the 'leaked' and 'hi-jacked' commissions far outweigh the benefits of true 'new traffic' generated.
This is relevant not just for those running affiliate programmes of course -- if I was a 'good' affiliate myself I wouldn't want to be driving traffic to a website that is dominated by voucher code activity as I would know my affiliate commission is likely to be hijacked by a voucher code site at check ot.
Glad I've got that off my chest.
And yes, I have been through the process of paying a fortune to Voucher Code affiliates (when the programme was being managed for me by an idiot) and I have observed what happens when you tur them off (no discernible impact on traffic or revenue generated, massive saving on commissions and funded voucher discounts) so for my sites at least I have tested and validated the hypothesis that Voucher Code sites are mostly leeches and to be avoided.
And yes, it irritates me that I know they are highly successful and they make a fortune ... which is why I have written this blog in the hope that the bubble will burst for them soon!
Maybe we can coin a new term: "Vouchasites" (Voucher Sites + Parasites)
Wednesday, 10 February 2010
For those who are interested, my 'day job' involves looking after
... and I retain an active shareholder interest in